Better yields for users, more secure validators, and better conditions for AVSs.

A few days ago, we excitedly announced our partnership with DV Labs and our membership in the Obol Collective, an alliance of protocols committed to increasing decentralisation of the Ethereum ecosystem. Byzantine's native restaking vaults mandatorily include Distributed Validators, and DV Labs builds the middleware to make that possible.

This partnership is the latest achievement in our journey to building the most decentralised, open restaking aggregation layer.

TLDR: Why do DVs matter?

Alright, enough flexing now. You want to know why the hecc DVs are actually useful for restaking. In short, DVs:

• Increase security for restakers
• Make restaked capital more reliable for AVSs - meaning higher yield for restakers
• Improve reliability of protocol ETH validators
• Decrease risk for ETH node operators

Let's break all of this down.

What is DVT?

Distributed Validator Technology (DVT) distributes the work of one or multiple validators among several operators who check each others' work. Each operator holds a share of the validator key and when a sufficiently large majority of operators agree, threshold signing allows them to send a validator message.

This brings a number of key advantags over traditional validators:

• Protection against malicious operators: Since a cluster can tolerate a number of malicious operators, the validator's messages are less likely to be fraudulent.
• Protection against accidental slashing: Since no operator controls the entire key, the risk of accidental double-signing, key duplication, or similar errors is mitigated.
• Protection against validator client issues: Node operators in a cluster are able to run different validator clients, thereby shielding against downtime resulting from an error or bug in the software of any one particular validator client.
• Higher reliabilitiy / fewer missed rewards: If one operator gets struck by lightning, the others in the cluster are able to keep the shared validator going.

From a systemic perspective, lower probability of malicious behaviour and more uptime are obviously great. But we're not here for some philosophical *systemic benefit*. We want real stakeholder benefit. And with restaking, DVs have huge impacts on utility for AVSs, node operators, and most importantly stakers.

The node operator perspective: More reliable validators

For node operators - especially professional ones - the joys of DVs are clear: The more reliable an operator or a cluster of operators is, the lower the risk associated with running large numbers of validators on it.

Consider a Service Level Agreement that a node operator may have with a staking capital provider or with a staking protocol. Any slashing or missed rewards will either be a contractual fine for the operator or a "margin of error" that could be reduced to earn higher prices from stakers.

Even for the home staker DVs are highly beneficial: A home staker participating in a DV cluster will be able to permissionlessly enter a cluster at a much lower required bond, since the risk associated with him is greatly reduced. That in turn means he is able to achieve higher capital efficiency and gain more yield for his assets. Yay for decentralisation!

The AVS perspective: Better restaked capital

Close your eyes. Picture yourself in cyberspace. You're an AVS now. Manifest it. Now, what do you want? If you manifested correctly, what you want is cryptoeconomic security.

You want ERC20 tokens, or better yet staked ETH, as collateral that secures the validation work of the operators running your network. This is crucial, because without a large enough and reliable restaked asset base, your entire network is at risk of a 51% attack. Implicitly, you're therefore dependent on the Ethereum validators handling the staking of your underlying assets!

Why? If ETH is staked and then restaked into your network, and the ETH validator double-signs, then that validator is slashed. This means that your network just lost that amount of restaked security and marginally increased its 51% attack risk.

So, how can this be avoided? By making the validator more secure. And how can the validator be made more secure? With DVs.

In summary, assets staked on a DV cluster and then restaked into AVSs therefore have a greater value to those AVSs, since they represent a greater commitment to AVS security. It is not unlikely to assume that AVSs will begin incentivising DV-staked ETH over default-staked ETH in the near future.

And that means higher potential yields for stakers.

The staker perspective: More security

The staker is a simple being. He seeks yield, and he fears slashing. And that is why DVs are deeply necessary to improving his experience.

DV-powered staking clusters have a greatly reduced risk of slashing and inactivity penalties. And while the matter of inactivity penalties and operator reliability will be the subject of a future article on our auction system, slashing is something to talk about now. It is this slashing risk reduction that makes DVT the future of staking - lower risk for the same staking yield.

But the restaking yield is not the same. DV-staked ETH provide more security to AVSs than traditionally staked assets and will, in a competitive market, earn higher yields as a result.

The challenge & solution for stakers

So why have DVs not taken over restaking yet? Well, because it's been hard to access.

This is where our new friends at DV Labs come in. By integrating directly with the most secure and decentralised DV middleware on the market, Byzantine can enable its users to set up their own DV-powered restaking vaults in just a few clicks.

Together, we will not only add an additional layer of security, but also one of decentralisation.